Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
20 Apr 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹0.50 lakh on Jila Sahakari Kendriya Bank Maryadit, Sagar, Madhya Pradesh, for contravention of and non-compliance with RBI directions on Know Your Customer (KYC). The violation was identified in an inspection report based on the bank’s financial position as of March 31, 2019. After issuing a notice, considering the bank’s written reply and oral submissions at a personal hearing, RBI held that the charge was substantiated and imposed the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after an inspection of the bank’s financial position as on March 31, 2019 found contravention of and non-compliance with RBI’s KYC directions. After issuing a show-cause notice and considering the bank’s replies and oral submissions, RBI concluded the charge was substantiated and that penalty was warranted under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty; the release does not impose any additional operational restriction or ongoing business condition. The action signals compliance deficiencies in KYC processes, but it does not state that customer transactions are invalid or that the bank’s business activities are curtailed.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 19 Apr 2021
- Effective From
- 19 Apr 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank